The Ethereum Name Service’s native token ENS surged more than 40% on January 3 after Ethereum co-founder Vitalik Buterin spoke positively about the platform and said:very importantThis is for the ETH ecosystem.
At press time, ENS is trading at around $13.94, up 40.38% in the last 24 hours. The token’s market capitalization is approximately $423.2 million.
During the same period, the token’s trading volume was approximately $364.28 million, indicating a high level of market activity.
Addresses linked to the Ethereum name control a total of $277 million in various cryptocurrencies, including ether, wrapped ether, USDC, and Uniswap tokens. Large amounts indicate significant financial activity within the ENS ecosystem.
ENS integration
Buterin’s support for ENS, which he describes as “very important”, has been pivotal in the upward trend.
He believes that layer 2 blockchains should integrate the ENS domain to improve user experience in decentralized finance (DeFi) due to the need for trustless Merkle proof-based CCIP verifiers. This integration allows ENS subdomains to be registered, updated, and read directly from the Layer-2 platform.
Buterin also recently proposed a new tax on ENS domain names to ensure broader brand adoption and decentralized ownership of ENS addresses. The proposed tax includes a 3% annual fee based on the highest bid for the domain name.
This fee model promotes broader adoption by discouraging the hoarding of domain names for profit and encouraging their use by organizations that actively use domain names, as the funds from these fees support Decentralized Autonomous Organizations (DAOs). It is intended to potentially benefit ENS token holders. ) is related to the ENS.
Demand-based recurring pricing
Buterin also previously proposed an alternative to Harberger’s taxation of ENS domains in 2022.
Instead of the Harberger model, in which asset owners set the value of their assets and pay a percentage of that asset in annual taxes, Buterin proposed a demand-based recurring pricing model.
In this model, the annual domain fee increases proportionally to the domain’s valuation, which in turn increases based on public bidding from other users. The goal of this approach is to create a fairer and more dynamic pricing mechanism that reflects the actual demand and value of ENS domain names.